Generating a Big Impact with a Small Audit Staff-Strategy IV

Strategy #4: Improve Internal Audit Processes

Some of the biggest impediments to internal audit productivity are ineffective and inefficient processes. Large audit staffs can afford a certain amount of inefficiency. Small shops cannot. As a profession, we still have quite a bit of work to do in this area: Despite the fact that we are experts in reviewing operations, quality reviews often indicate that internal audit organizations can improve processes for planning (both annual and at the engagement level), conducting engagements, documenting results, reporting results, monitoring results, and for quality controls.

One common objective is to reduce engagement cycle time, or the time required to complete an audit. During the past century, delivery of news information has progressed from monthly, to weekly, to daily, to hourly, to the present, when news is delivered instantly to your cell phone or desk. Our customers are becoming conditioned to speed, but unfortunately, internal auditing has not kept pace.

Timeliness is a journey that begins with the survey phase and includes planning and fieldwork, concluding with the final report. Some of the reasons for long cycle time include an extensive survey phase, scope or objectives that are too broad (or that grow over time), poor plans, inefficient methodology, uncooperative activity personnel, limited expertise, staffing constraints, excessive evidence/workpapers, delays in writing draft reports, an inefficient editing process, untimely supervisory reviews or quality assurance processes, extensive legal reviews, delays in receiving final approval for release of draft reports, delays by activity personnel in providing a response, or delays in resolving disagreements.

Unfortunately the consequences of long cycle time can be disastrous: poor customer satisfaction, out-of- date audit results, diminished value of products, or even diminished value of the audit organization itself. In internal auditing, the work never stops, so it’s important to remember to wind up older projects before the audit information can become stale.

This is strategy 4 of 6.

From Richard Chambers, CIA, CGAP, CCSA


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